When Will We See the World’s First Trillionaire?

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Technically, there are already trillionaires in the world. After all, the term means nothing more than someone whose wealth is worth more than a trillion units of whatever currency is being used for the comparison. As a result, a lot of people can be considered trillionaires when their wealth is measured using the less valuable currencies in the world, with current examples ranging from the Iranian rial to the Vienamese dong. (1) Of course, this is not what actually comes to mind for most people when the term trillionaire is brought up, since that tends to refer to someone whose wealth is worth a trillionaire or more when measured in US dollars.

When Will We See the First Trillionaire?

So far, no one has even come close to becoming the first trillionaire. (2) For example, Business Insider claims that Bill Gates was the single richest person in the world at the start of 2016 with $87.4 billion, which is less than one tenth than what a trillionaire would have. Following him are Amancio Ortega with $66.8 billion, Warren Buffet with $60.7 billion, Jeff Bezos with $56.6 billion, and David Koch with $47.4 billion. In fact, even when the wealth of the 50 richest people in the world has been combined together, that would still be no more than $1.46 trillion.

As a result, it can seem as though the first trillionaire will not be making their appearance in the world for some time to come. However, it is important to note that the current wealth of the richest people in the world can be misleading when it comes to predicting the future wealth of the richest people in the world because economic conditions are changing on a constant basis. For example, the richest people have been becoming richer and richer for some time now, meaning that the first trillionaire could be making their appearance in the world sooner than most people would expect.

Credit Suisse has predicted that there will be a lot more millionaires, a lot more billionaires, and more than ten trillionaires in two generations, which is actually a relatively conservative estimate. (4) Other financial experts have made more optimistic predictions, ranging from the chief insights officer of Ipsos MediaCT Steve Kraus, who has stated that he would not be surprised if a trillionaire appeared within 25 years, to the New World Wealth senior analyst Andrew Amoils, who has stated that there is an 11 percent chance that a trillionaire will appear within the same period of time. (4) Assuming that these sources are right, it seems that chances are good that the first trillionaire in the world is someone living right now.

There are a number of reasons that this is the case. For example, new techniques and technologies are being launched on the open market on a constant basis, meaning that there are more and more opportunities for people to come up with something that will catch the attention of the world. Furthermore, the world is becoming more and more interconnected even as most of its countries are becoming wealthier and wealthier, meaning that there are more and more opportunities for successful companies to make a sale. To understand this point, imagine how much less Mark Zuckerberg’s Facebook shares would be worth in a world where social media platforms were limited to single countries because of economic barriers rather than most of the world.

Finally, it should be noted that inflation has a role, though a relatively small role in the grand scheme of things. In short, some inflation is a sign that the economy is performing well because it shows that people are competing so much for a limited number of products and services that they are actually driving up the prices, thus making their currency less and less valuable over time. With sufficient passage of time, this can result in noticeable changes to the purchasing power of that currency, which in turn, means that someone might actually have the same purchasing power even if they have a more impressive-sound number to their name. This can be seen the example of the first billionaire in the world, John D. Rockefeller, who topped out at around $50 billion but would be worth around $400 billion in modern times. (5)

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What Are the Obstacles to Someone Becoming a Trillionaire?

With that said, it is important to note that there are some serious obstacles to someone managing to reach a trillion USD sometime soon. First, it seems probable that the current richest people in the world will not be the ones to become the first trillionaire in the world. In part, this is because most of them are old, meaning that they do not have the time needed to do so. However, it should also be noted that Bill Gates, who is still relatively youthful, has no real interest in making as money as possible. Second, strengthening governments all around the world mean that the richest people in the world are finding it harder and harder to make their fortunes through dubious means. For example, some of the most powerful countries in the world have a strong incentive in reducing the number of tax havens out there, thus making it harder and harder for the rich and unscrupulous to escape their tax burdens. Likewise, while rich people in previous centuries were capable of plundering entire countries that were too weak to resist them, that has become unacceptable behavior in modern times. Third, making a trillion means that a would-be trillionaire would have to take a lot of risks, particularly since they will have to venture out into unfamiliar fields because there is a limit to what their existing investments can make for them. Since comfortable people are disinclined to make such aggressive moves, this means that the richest people in the world are actually psychologically-disinclined to make themselves trillionaires.

Further Considerations

Summed up, it seems that there is a good chance that the first trillionaire in the world will be making their appearance within a few decades. However, it is important to remember that predicting years in advance is an extremely challenging task, while predicting decades in advance is exponentially more so. As a result, the predictions mentioned here may or may not turn out to be true because their underlying assumptions can undergo a great deal of change within that time.

References:

  1. http://worldknowing.com/top-10-country-with-lowest-currency-in-the-world/
  2. http://www.businessinsider.com/50-richest-people-on-earth-2016-1
  3. http://www.usatoday.com/story/money/business/2013/10/24/worlds-first-trillionaire/3179099/
  4. http://www.cnbc.com/2014/04/24/will-there-be-a-trillionaire-in-the-21st-century.html
  5. http://www.investopedia.com/financial-edge/0211/the-first-trillionaire.aspx

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